Key Points
- Phoenix Wallet, a Bitcoin wallet, will cease operations for U.S. residents from May 3.
- The decision follows legal action against Samourai Wallet founders and the uncertainty over U.S. regulations.
Phoenix Wallet, a wallet for Bitcoin transactions, has revealed plans to halt services for U.S. users starting May 3.
ACINQ, the firm behind Phoenix Wallet, intends to withdraw the app from U.S. app stores, thus preventing U.S. users from accessing it after the specified date.
Instructions for U.S. Users
ACINQ has urged its U.S. customers to immediately withdraw their funds. It warned against force-closing wallets to avoid higher on-chain fees.
For iOS users, the company advised navigating to the wallet’s settings and selecting “drain wallet.” Android users are instructed to go to the settings and click on “close channels” to safely empty their wallets.
Uncertainty Over Regulations
The specific reason for the app’s removal from U.S. app stores remains undisclosed. However, ACINQ hinted via a tweet that recent U.S. government statements raise questions about the potential regulation of self-custodial wallets, Lightning service providers, or even Lightning nodes as Money Services Businesses.
This move follows a lawsuit against Samourai Wallet’s creators. Federal prosecutors in the Southern District of New York indicted Samourai Wallet founders Keonne Rodriguez and William Lonergan Hill on April 24.
The founders are accused of facilitating illegal transactions through Samourai. The indictment suggests Rodriguez could face up to 20 years in prison, while Hill might serve up to five years if found guilty.
The U.S. Department of Justice claims that Samourai’s creators enabled over $2 billion in unlawful transactions through the platform, collecting over $4.5 million in fees since 2015. The platform was allegedly marketed as a tool for censorship resistance and facilitating illicit activities.
The FBI issued a warning to users about unregistered crypto firms believed to be money services businesses following Rodriguez’s arrest. This action is part of a broader pattern of U.S. authorities targeting wallets and mixers involved in questionable activities.
The crypto community has expressed outrage over the indictments. CryptoQuant CEO Ki Young Ju defended Rodriguez and Hill, asserting that privacy protection is a fundamental aspect of Bitcoin.
Ju likened the situation to punishing the inventor of a knife rather than the person misusing it, emphasizing that the intent behind using a tool determines its legality.
